How to smooth multiple vertices at a point?
The tool is working, you just need more geometry and bump up the number of times to smooth the mesh.





So the tool works but I doubt it will give you the results you are looking for. It's best if you model this curved bit by just add some supporting edge rings through the top of you mesh and moving these outwards.



Later as your model gets more refined, you can add a Subsurf modifier and some supporting loops along the edges to get a nice sleek look.



NB: It's best to get the basic outline/shape of your model down before adding any deformation modifiers.